Arbitrator Did Not Exceed His Powers By Enforcing Oral Fee Splitting Arrangement
Attorneys Cohen and Sheinkopf had an oral agreement to split client fees: 75% to Cohen, 25% to Sheinkopf. After the two attorneys went their separate ways, they arbitrated a fee dispute in which the arbitrator enforced their oral fee splitting agreement, resulting in an award that the trial court confirmed as a judgment. Sheinkopf appealed, arguing that because the arbitrator’s enforcement of an oral fee splitting arrangement violated Rule of Professional Conduct 2-200, and was contrary to public policy, the arbitrator had exceeded his powers. Cohen v. Sheinkopf, Case No. B252301 (2/3 Oct. 2, 2014) (Edmon, Kitching, Aldrich) (unpublished).
Some courts have indeed stated an arbitrator exceeds his or her powers by issuing an award violating “an explicit legislative expression of public policy.” But apparently not all public policies are equal. Here, the Court of Appeal viewed the dispute among attorneys as more of a private matter, with the public policy served by the prohibition against fee splitting not justifying judicial review of the arbitration award.
Sheinkopf’s argument that the trial court erred by concluding she waived the right to litigate a statute of limitations issue also made no headway, because she submitted the limitations issue to the arbitrator without objection.
However, Sheinkopf was successful in getting a modification of the judgment, because the trial court’s judgment simply failed to include an amount for $6,312 that the arbitrator had awarded to her – and she also received prejudgment interest on that omitted amount.
Comments